This is my guess: (Don't hold me liable if I am wrong)
If you put it together negligently, and because of that something goes wrong and he gets hurt, you are probably at fault. Eg. the gas tank flips over and gas leaks on the engine and explodes...
If you put it together according to specs, and he crashes it because he is riding it unsafely, or it is another driver's fault, you probably won't be held liable.
Honda makes motorcycles... if someone buys one and then crashes it, is Honda liable? If you install a super-engine into your buddies musclecar, and he drives it too fast and crashes, are you at fault? What if a shop did it?
If anything, I would think the guy who sold him the kit would be liable.
Bottom line is that if he gets hurt and it is because of something you did wrong, it might be considered your fault in the court of law.
The problem is the sue happy times we live in. If a lawyer gets involved, they will sue anyone that is involved that has anything or has any insurance...basically anything they can get.
There is a case her where I live about a death of a Doctor in vehicle accident where the other driver was drunk and at fault. The other driver had no insurance and not much money, so they are going after the bowling alley that served him the alcohol because they do have insurance and assets.
I would think if you charged someone money to install the engine, you might be held liable if anything went wrong. Just my thoughts.
Lately I tell folks "When it gets down to it, I make about $10 an hour building bikes. If you help do the tires, zip tie the spokes, put a few miles on it, and locktite the bolts, you'll understand the bike better".
That's a grassroots idea, so they are paying you similar to paying a guy $100 to move furniture on the back of his truck.
You can order the engine for them, but ADVISE is your main asset, what works and what doesn't. They are paying for your knowledge, not the product.
The bike I sold came with a contract stating that it was being sold a a piece of static artwork. Any attempt to use it as a vehicle was inherently unsafe and might result in injury or death. The guy signed a copy for me and one for him. He thought it was a great joke. ha ha.